LONDON: Italian and Spanish government bond yields rose on Monday after PMI surveys of the service sector activity in the two countries came in below expectations.
"The Spanish (PMI) was shocking, it came in way below, the Italian one was quite weak and the French one was quite weak as well. That's not helping and given the performance of the periphery last week it's probably not that surprising it gives back a little bit," one trader said.
Italian two-year yields were up 8 basis points at 1.9 percent, while Spanish 2-year yields were up 7 bps at 2.39 percent. The Italian/German 10-year yield spread widened by 8 bps to 319 bps, while the equivalent Spanish spread expanded by 6 bps to 317 bps.
The cost of insuring debt issued by Italy and Spain against default also rose, according to data provider Markit. Spanish 5-year credit default swaps rose 13 basis points to 388 bps, while Italian CDS were up 12 bps at 370 bps.
Most other euro zone CDS were also higher on the day.
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